An agreement (contract) is a legal act. The parties concluding an agreement commit to perform it under the conditions specified therein. The basic function of an agreement (a legal act) is to develop a contractual relationship. The declarations of intent made by the parties constitute a necessary part of every agreement. By entering into an agreement, the said declarations of intent are agreed upon.
It is crucial due to the contents of Article 65 of the Civil Code, which holds that a declaration of intent should be interpreted in view of the circumstances in which it is made as required by principles of community life and established custom.
In the case of agreements, it is the intent of the parties and the objective or purpose which should be analyzed, rather than its exact wording. In other words, the legal relationship created as a result of entering into an agreement is not determined solely by the exact wording of its provisions. In particular, the agreement’s title does not settle its type.
In order to determine what type of an agreement we are dealing with, we must examine not only its contents but also the circumstances under which it was concluded, at the time of its conclusion, principles of community life and established custom and, above all, common intention of the parties.
It is possible to determine that an agreement entitled for example a Sales Agreement, is really a Cultivation Contract, if its features and the circumstances under which it was concluded at the time of its conclusion, principles of community life and established custom and, above all, common intention of the parties, demonstrate that it is a Cultivation Contract.
The determination is done by the Court at the request of the Applicant. The Applicant may request that the Court establishes the presence or absence of a legal relationship or, if it is in his legal interest or in pending proceedings, the right that the agreement s/he concluded is in reality a different type of an agreement (contract) than the type suggested by its name.
Since every agreement is governed by its own rights, it is extremely important to determine what type of an agreement we are looking at.